December 11, 2019
Gold stalls ahead of Fed policy statement, tariffs deadline
(Reuters) - Gold was little changed on Wednesday, with market activity largely subdued ahead of the U.S. central bank's economic policy statement and a fast-approaching tariffs deadline, while palladium hovered near previous session's record.
Spot gold dipped 0.1% to $1,463.20 per ounce as of 0559 GMT. U.S. gold futures were also down 0.1% at $1,467.40.
"The market is in a holding pattern. Stocks, oil, currencies and gold are awaiting the events that are coming in the second half of the week," said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA.
The Federal Reserve will issue the statement of its December policy meeting later in the day.
Although the central bank is expected to leave interest rates unchanged, investors are eager to hear its outlook for the economy, mainly hit by the U.S.-China trade war.
"The Federal Open Market Committee (FOMC) will update the dot-plot, so that will be closely watched," Halley said.
"If they provide a more dovish outlook, that would potentially weaken the dollar, which will be positive for gold."
On the trade front, investors maintained a cautious stance as U.S. President Donald Trump has to decide whether to impose tariffs on nearly $160 billion in Chinese consumer goods just weeks before Christmas.
The Wall Street Journal on Tuesday said both sides' trade negotiators were planning for a delay of the December tariffs.
"Should both parties fail to reach positive consensus, gold prices will receive strength over lacklustre risk appetites for the near term," Phillip Futures analyst Benjamin Lu said in a note.
On the technical front, signals are mixed for spot gold as it keeps bouncing towards a resistance at $1,466 per ounce, according to Reuters technical analyst Wang Tao.
Elsewhere, the palladium gained 0.2% to $1,899.67 an ounce, having surged past the key level of $1,900 an ounce for the first time on Tuesday.
Speculative buying and a mine closure in major producer South Africa have supported palladium prices, which are expected to rise further in the longer term, a trader from Japan-based retailer Tokuriki Honten Co. said.
Mines across South Africa were shutting down after a largest power blackout in more-than a decade, with some major players forced to cut production.
The news had also supported platinum prices, which rose as much as 3% in the last session — most since at least early September. On Wednesday, the metal fell 0.3%, to $918.88 per ounce.
Silverslipped 0.3% to $16.60 per ounce.